Fohf managers opt for more protection

Research shows managers buying volatility arbitrage vehicles

Widening credit spreads and the prospect of rising default rates has led fund of hedge fund managers to up their allocation to convertible and volatility arbitrage vehicles, according to Standard & Poor's. According to S&P, although managers believe last year's credit crisis created significant opportunities, most feel it is necessary to adopt portfolio protection in difficult market conditions. The group's latest research shows firms, such as RMF, Deka and Sail, have recently increased exposure to convertible and volatility arbitrage funds at the expense of equities. Sail's flagship ...